Vestas Annual report 2017

Summary: For full year 2017, revenue amounted to EUR 10.0bn, the EBIT margin was 12.4 percent, total net investments* were EUR 407m, and free cash flow* amounted to EUR 1,218m – in line with the expectations to revenue of EUR 9.50bn-10.25bn, an EBIT margin of 12-13 percent, total net investments* of approx. EUR 400m, and free cash flow* of EUR 1,150m-1,250m. Compared to 2016, revenue, earnings, and free cash flow decreased in 2017, but remain at a healthy level, despite highly competitive markets. Order intake in MW increased in 2017 compared to 2016, and the value of the combined order backlog continued to grow during the year.

The wind turbine order intake increased from 10,494 MW in 2016 to 11,176 MW in 2017 and the value of the service order backlog increased by EUR 1.4bn to EUR 12.1bn.

For 2018, Vestas expects revenue to range between EUR 10bn and 11bn, including service revenue, which is expected to grow. Vestas expects to achieve an EBIT margin of 9-11 percent, with the service EBIT margin remaining stable.

Total investments** are expected to amount to approx. EUR 500m, and free cash flow** is expected to be minimum EUR 400m in 2018.

Vestas is able to present updated long-term financial ambitions that reflect its projection for market conditions and the presumed result of its strategy.

Vestas envisions market conditions which in the long term will reflect wind power having achieved merchant levels in the vast majority of markets. The wind power industry is undergoing a transition towards a more mature, unsubsidised renewable energy industry. This transition leads to a highly competitive market, and will likely drive a further consolidation in the industry. Beyond the transition, a matured market for wind energy creates opportunities for Vestas to leverage and strengthen its leadership position. Within this context, Vestas maintains its ambition to be the market leader in revenue, while the EBIT-margin ambition is changed to at least 10 percent from previously best-in-class margins.

As a result of the strong performance during the year, the Board of Directors proposes to the Annual General Meeting that a dividend of DKK 9.23 per share, compared to DKK 9.71 last year, and equivalent to 29.9 percent of the net profit for the year, be distributed to the shareholders. A new DKK 1.5bn (approx. EUR 200m) share buy-back programme is planned to be initiated shortly and to be conducted during the period until the disclosure of the interim financial report for first quarter of 2018 on 4 May 2018.

“2017 was a year that saw fierce competition, price pressure and the continued maturity of the wind energy sector. In this environment, Vestas’ 2017 performance was strong, as we once again led the industry on profit margins and produced solid revenue, free cash flow, record order intake, and a growing and profitable service business. We demonstrated that even in such challenging conditions, we can control costs and use our global presence and technology leadership to remain the industry leader,” says Anders Runevad, Group President & CEO.

*) Before investments in marketable securities and short-term financial investments, and incl. proceeds of EUR 99m from sale of office building facilities.
**) Excl. the acquisition of Utopus Insights, Inc., any investments in marketable securities, and short-term financial investments.

Information meeting (audiocast)

On Wednesday, 7 February 2018 at 10 am CET (9 am GMT), Vestas will host an information meeting via an audiocast. The audiocast will be accessible via vestas.com/investor.

The meeting will be held in English and questions may be asked through a conference call. The telephone numbers for the conference call are:

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